The month of October is typically considered a favorable time for the cryptocurrency market, particularly for Bitcoin. Last October, the BTC market saw an impressive return of +28.5%. However, the latest trend of capital exiting the crypto market raises concerns. Will this unexpected trend affect our broader expectation of a bullish Q4?
Capital Outflows from Crypto Exchanges
The CEX Transparency data shows that nine out of the ten top exchanges have reported negative inflow over the past month. Among them, Binance has the highest one-month negative inflow of -$1.446 billion. Bitfinex, HTX and OKX follow closely with -$283.12 million, -$269.34 million and -$262.57 million, respectively. Bybit, with $143.33 million one-month inflow, is the only exchange that shows a positive flow.
Significant Stablecoin Outflows
As per a report, the majority of the outflows consisted of stablecoins. The Stablecoin Exchange Flow chart indicates that stablecoin liquidity on exchanges has plummeted from $38.5 billion to $35 billion. Stablecoin liquidity is generally used to evaluate the buying power of the market. A drop in this index suggests a decrease in investor interest to make new purchases.
BTC Spot ETF Market Sentiment
According to the total Bitcoin Spot ETF net inflow data, in the first three days of October, the market witnessed negative flows; on October 1, it was -3.83K, and on October 2 and 3, it was -870.41 and -894.05, respectively. Last day, it recorded a positive net inflow of +3.72K.
In conclusion, if outflows from stablecoins continue and ETF balances decrease, Bitcoin may not be able to rise up to the general expectation of crypto enthusiasts this month. Anyway, it is too early to say whether the new trend can cast shadows over the Q4 bullish expectation or not.
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October’s Bitcoin market outlook raises concerns with significant capital outflows and stablecoin liquidity drops. Will Q4 remain bullish?
